Stronger oversight for Australia's offshore oil and gas industry
Australia’s parliament has passed legislation to strengthen Australia’s offshore oil and gas regulatory framework.
The changes enhance the government’s oversight and scrutiny of a range of company transactions to ensure that entities that want to operate in the oil and gas industry are suitable, and have the financial resources and technical capability to operate and decommission safely.
The changes also expand the government’s ability to call on a previous titleholder to pay for decommissioning and environmental remediation if they sell a title and the new titleholder is then unable to meet their financial obligations.
Minister for Resources and Water Keith Pitt said the laws make sure taxpayers are not left to pick up the costs of future decommissioning work on offshore oil and gas projects.
“The trailing liability provisions will be an action of last resort when all other safeguards have been exhausted and will reduce the risk that the financial costs of decommissioning will be left to Australian taxpayers,” Minister Pitt said.
“It also sets the expectation that sellers will undertake appropriate due diligence before selling assets, titles and infrastructure, so they can avoid being called back to decommission and remediate title areas.”
Administration will also be improved, enabling electronic lodgement of applications and documents.
The measures were developed following extensive consultation with industry and adopt recommendations from the Walker Review which looked into the circumstances leading to the liquidation of Northern Oil and Gas Australia group of companies.
Minister Pitt said the changes built on a robust regulatory framework that has supported the offshore oil and gas industry, which has delivered enormous benefits to Australia through investment, exports and employment over the past 50 years.
“The measures strike the right balance between investment in the offshore oil and gas industry and managing a maturing industry, demonstrating this government’s ongoing commitment to a best practice, globally recognised oil and gas sector.”
The measures in the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill package will become law 6 months after they receive Royal Assent, with the trailing liability provisions applying from 1 January 2021.
Media contact: Minister Pitt's office 02 6277 7180